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Changes to Singapore arbitration laws make country more attractive place to resolve disputes, expert says

Businesses are more likely to choose Singapore as a location for bringing disputes to international arbitration following changes to legislation in the country, an expert has said.11 Apr 2012

Earlier this month the Singapore Parliament passed amendments to the International Arbitration Act (IAA).

One of the changes made to the legislation was to introduce the possibility of parties appealing to Singapore's High Court if a Tribunal decides it does not have jurisdiction to hear cases. The Court of Appeal could also potentially rule on that issue if an appeal is allowed.

Tribunals will also be able to force parties in dispute to pay interest on any money they owe following a ruling. The power allows Tribunals to force payments calculated on the basis of compound interest, where interest on money owed itself gains interest.

One amendment has also changed the way that 'arbitration agreement' is defined under the terms of the IAA. Such an agreement determines what disputes parties have agreed to settle via arbitration. Now an arbitration agreement concluded orally, by conduct or through other means will be considered as agreed upon providing its content is in some form recorded.

International arbitration specialist Helen Waddell of Pinsent Masons MPillay in Singapore said that the revisions help make the country a more attractive place for companies looking to resolve disputes.

"These amendments are a positive addition to the existing legislation and an indication of Singapore's desire to strengthen its position as a hub for international arbitration," Waddell said. "The international arbitration facilities offered by Singapore are already exceptionally good in terms of venue, administration and experienced arbitration practitioners, so an amendment to the legislation can only enhance matters further."

"Statistics from the Singapore International Arbitration Centre indicate an increase in their case load from 58 cases in 2000 to 188 in 2011 and this is reflected by our own clients who are increasingly selecting Singapore as their preferred seat of arbitration," Waddell said.

Further changes to the way in which foreign cases are dealt with at arbitration or in litigation by the Singapore system could further enhance the attractiveness of the country as a place to resolve global disputes, another Singapore law expert has said.

Under plans laid out in the Foreign Limitation Periods Bill, time limits on when cases can be brought will generally be applied on the basis of the limits set by the foreign country to which a dispute relates. Under the existing law, where foreign claims are brought in Singapore, a foreign limitation period that bars a remedy does not apply and the Singapore law on limitation applies instead.

The Bill seeks to change this, and allow foreign limitation periods to apply as a general rule. Simply put, this means that if an action is commenced in Singapore in relation to a contract governed by Indonesian law, the Bill provides that the applicable limitation period will be determined by Indonesian law as that is the law that governs the dispute.

If a foreign-set limit conflicts with public policy, such as it would cause undue hardship to a person who is or might be made a party to the action or proceedings, the limit would not apply

"The Act, if passed, would greatly assist in the resolution of issues of conflicts of laws where foreign disputes are litigated or arbitrated in Singapore," Joanna Seetoh, a Singapore disputes specialist with Pinsent Masons's joint law venture partner MPillay said. "Together with the amendments to the International Arbitration Act, the Bill would help to ensure that Singapore remains an attractive venue for international arbitrations."

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